Excuse us if we talk about money for a moment. We know it’s something that people can find embarrassing. But, we want to be as transparent as we can about the costs of the legal service we offer and we know there is still a lot of misunderstanding out there about how solicitors charge. We know there is a common view that solicitors “charge a fortune” and we’d like to bust some myths and explain exactly how we at Springhouse charge our clients.
We’re happy to report that when it comes to charging for their professional services, solicitors no longer charge by the word – as once they did! By far the most common method of charging used by law firms is the hourly rate. There are some other methods which are used such as “no win, no fee”, but, in common with most other law firms, we primarily use hourly rates.
Put simply, the hourly rate is a set amount charged for the actual time your solicitor spends working on your case. If the solicitor’s hourly rate is £200 and your matter takes five hours in total, your bill will be £200 X 5 = £1,000. VAT at 20% will then be added, bringing the total bill to £1,200.
In a nutshell, time is money – the more time that is spent working on your case, the more it will cost.
We will always give you our best estimate of how long we think a piece of work will take (and cost) so you won’t get any nasty surprises. If things change (as they can do when matters progress) we will keep you informed. In addition, we will break any big pieces of work down and send you interim bills so that you aren’t paying one big bill at the end – we refer to this as “pay as you go”.
How is time recorded?
Every day, solicitors are required to record their time showing which client they worked for, what activities they carried out and for how long. This is now all computerised with the data recorded eventually being used to generate a bill. Solicitors may record time manually or have digital clocks on their computers which they can stop and start as they switch between work for different clients throughout the day.
Work done on your case will be recorded under various categories such as ‘attending (or talking to) client’, or ‘drafting correspondence’. At Springhouse we will start the timer when we begin work on your file, and switch it off at the end. Otherwise, if every individual task takes less than 6 minutes but is recorded separately, the final bill may be over inflated.
How do hourly rates vary?
Different firms will have widely differing hourly rates depending on their specialisms, location, size and reputation. Prestigious City firms will obviously be charging more for corporate advice than a small firm in Devon will charge for conveyancing. This is linked to a firm’s overheads, who their clients are and market forces.
Where you are getting quotes for the same piece of work from solicitors in a similar area, it may be tempting to automatically go for the firm with the lowest hourly rate. However, this is only part of the story and you should be cautious in deciding who to use based solely on hourly rates as this may not ultimately provide you with the best value (see below).
Some firms will have different hourly rates for different staff who have different levels of experience. They may use unqualified staff, for instance trainees or paralegals, who will have lower rates. Newly qualified and more junior solicitors will charge slightly more with rates increasing all the way up to partner (the most senior and experienced solicitors in a firm). A lawyer’s personal hourly rate is sometimes described as their “charge out rate”.
At Springhouse we apply the same hourly rate to all our lawyers working at the same location. This is sometimes referred to as a “blended” or standard rate. This is because all of our lawyers will have appropriate experience for your case, and will therefore provide similar value per hour spent. Where rates vary across locations, this is due to the different overheads the firm has to meet in each place.
How is time calculated using the hourly rate?
We split each hour into 10 units of 6 minutes and will record our time in these units. Therefore, if a task takes less than six minutes we will round-up and charge for one unit. This may sound odd but, some suppliers will actually round up to the nearest half an hour and this method of splitting up the hour covers us for the time it takes to switch from one task to another.
Do hourly rates go up?
We may increase our standard hourly rate from year to year, depending on inflation. However, we will never increase the hourly rate you are being charged while your case is on-going, without your prior agreement.
Please call us for our latest hourly rates.
Does best price equal best value?
Whatever your reason for using a solicitor, you need to think about the outcome you are seeking and balance the likelihood of achieving a good result against the cost of doing so. In other words, do a cost/benefit analysis. For example, if you are threatened with dismissal by your employer, investing in advice from a good solicitor (who can negotiate on your behalf) could result in you being offered a far better termination package than you would otherwise have achieved.
It may be appealing to go to a firm who can offer you a very junior member of the team (who will have the lowest hourly rate) to work on your case. This can be a false economy however as you will have to factor in the additional time it will take them to do things, the additional research they will need to do, and the fact that they will need to be supervised by someone more senior.
And in terms of getting a good result, you may have more confidence in the experienced solicitor who will instinctively be able to advise you, having seen similar cases in the past. Otherwise you could end up with a higher bill and a worse result!
Don’t be shy, talk to us!
It’s a fact of life that people don’t always feel comfortable talking about money but, we encourage all our clients to talk to us about our fees, to ask questions and never be embarrassed to raise the issue. We our committed to transparency and are always happy to discuss funding arrangements.